CASE STUDY:

BACKGROUND OF THE CASE

 Multinational industrial manufacturing
company
 Headquarter - Peoria, Illinois
 37% market share
 Brand name-CAT
 Earthmoving , construction and material
handling equipments
 Engines-diesel and natural gas
PROS AND CONS
PRODUCT EFFICIENCY
 Advanced technology in machines
 Product Quality through investment in plant
and equipments
 Full line of products
 Manufacturing expertise
 Economies of scale
AFTER SALES SUPPORT (SERVICES AND PARTS)

 CUSTOMER TRACK SERVICE

 FIELD SERVICE
 TECHNICAL ANALYSIS
 SCHEDULED OIL SAMPLING
NEW FILTER AND DIRTY FILTER
 Sales lower than expected
 New and advanced design increased price of
filters at $3.08
 Competitive filters at $2.71
 Competitor’s oil filter outnumber the
caterpillar brand on traded engines
DIRTY FILTER
 Detection of several thousands defective and
dirty filters at metallurgical laboratory
 Foreign contaminants trapped inside
 These contaminants can damage engines
leading to repairs costing >$ 1000
 Filter shortage in the distribution system
 Lost sales and giving opportunity to
competitor
THREAT
 Rejected filters re-labeled by supplier with
CAT brand
 Violation of supplier’s agreement
 Action done against company’s policy
 Customers complaints severe engine damages
STRATEGIES
 Educate the customers regarding detection of
actual CAT logo on filters
 Reduce price for a certain time period and
then gradually increasing price of filters
 Can look for other suppliers of filters who can
be more reliable and loyal
 Expand its business to manufacture of oil
filters
THANK YOU